Dean L. Buntrock, chairman of Waste Management, said the agreement will establish a strong, experienced enterprise to deliver advanced waste technology at a time when many of the nation`s cities are facing a serious need for additional disposal capacity.

``The agreement with Waste Management will create an extraordinary opportunity for communities across America to receive vastly enhanced waste-to-energy services and for stockholders of both companies to benefit as well,`` said Michael D. Dingman, chairman and chief executive of Henley.

In addition to the enterprise`s total credit support of $1 billion, Oak Brook-based Waste Management will provide capacity for the disposal of ash residue from future waste-to-energy plants at the company`s disposal sites.

The new company will also focus substantial resources on accelerating the privatization of the water treatment market through consolidation of Waste Management`s EOS subsidiary with Wheelabrator Technologies` clean-water business.

Wheelabrator Technologies will use some of Waste Management`s disposal sites for development of new waste-to-energy facilities. Waste Management operates more than 110 sites and adds several facilities every year, many of which will be candidates for new waste-to-energy facilities.

The agreement is subject to certain conditions, including approval by the boards of the companies and the expiration of all applicable waiting periods under the Hart Scott Rodino antitrust act.